Reaction to measures in Irish 2013 austerity budget

By Jennifer O'Leary
Dublin reporter

image captionThere have been peaceful protests in the Republic of Ireland against austerity measures introduced in the past two years

The Irish government on Wednesday announced a range of budget measures - tax increases and spending cuts of 3.5bn euros were announced in Budget 2013.

That same evening one section of my local supermarket in Dublin proved busier than usual.

"That shelf was full earlier," explained shop manager Emmet Egan pointing to the wine section.

"It is really rare to see people buying six or seven bottles of wine on a Wednesday evening but in the last hour we sold at least 100 bottles of wine."

The brisk business may have been prompted by a rise from midnight in excise duty on alcohol including a one euro increase on a 750ml bottle of wine.

Outside on the street a frost was already forming on car windscreens.

And it is going to cost more to tax cars in the Republic next year.

But a property tax of 0.18% on homes worth up to 1m euro, and 0.25% on those over 1m euro has proved to be one of the main showstoppers of Budget 2013.

"Moving to a property tax in general is probably a good idea because it leads to a more sustainable taxation base," said Stephen Donnelly, an Independent TD for Wicklow and East Carlow.

"However at the moment I don't think people can afford it.

"People in the negative equity generation who bought a house, let's say in 2005, they would have paid 30,000 euros in stamp duty but it's now in negative equity, they can't get rid of it, mortgage rates are going up, it's taking every penny they have."

"And now the government has come along and said 'this thing that you have, this yoke around your neck, we are now going to tax you for the privilege of owning that debt', it is absolutely outrageous."

The Irish government has had to make spending cuts.

The core rates of social welfare were left unchanged but the carers grant will be reduced by 325 euros to 1,375 euros a year.

Child benefit will also be cut by 10 euros a month for the first two children, 18 euros for the third, and 20 euros for the fourth and any subsequent children.

Labour Party TD Aodhán Ó Ríordáin concedes that the cut to child benefit will be difficult for people to take.

"There are difficult measures and I'm not going to pretend otherwise but we protected education, which is the biggest investment in people's futures," he said.

Budget 2013 is only the second budget of the Fine Gael-Labour coalition government.

"We went in to protect the poor and middle income families, Fine Gael went into the budget negotiations to protect the rich and we found a budget which I think is fair," said Mr Ó Ríordáin.

Class sizes in private schools will also rise, which opponents say disproportionately affects Protestant schools.

"I don't accept that, I think it disproportionately affects people who have money to send their children to fee-paying schools" Mr Ó Ríordáin said.

"You don't look at this measure in regards to what religion people have."

The fine print of the budget will take shape in the coming days when different interest groups examine the details.

Stephen Donnelly disagrees with the politics of austerity.

"This budget is the latest chapter in a failed austerity-only approach," he said.

"We need to correct the budget deficit but if all you are doing is sucking money out of the economy and giving it to dead banks you do not get economic recovery."

Ireland's finance minister Michael Noonan said the Irish financial crisis could be summarised in one word, debt.

The fallout from Budget 2013 for many can also be summarised in a word - choices.

"I'm on a pension and I'm going to have to make choices," said one woman who asked to remain anonymous.

"The choice is between keeping my 77-year-old husband warm or feeding him, they are my choices, do I put food on the table or heat the house?"

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